Nobel in Economics to Nordhaus and Romer

The Nobel Prize for Economic Sciences 2018 was awarded to William Nordhaus for his work on climate change and to Paul Romer for his work on research, innovation and economic growth.

“It is a very significant Nobel Prize for Ca’ Foscari - commented Carlo Carraro, professor of environmental economics at the Department of Environmental Sciences, Informatics and Statistics and one of the founders of the research centre Cmcc@CaFoscari. Indeed Romer’s research showed how knowledge - hence education, research, innovation - is the most important determinant of modern economic growth. This contribution is a reference point in our daily activities at Ca’ Foscari and should be known by our private and public sectors”.
“Giving the prize to Nordhaus - Carraro continues - confirms the importance of including climate in evaluating growth and employment. If not, our social and economic systems may risk to face dramatic consequences. For years Ca’ Foscari has been at the forefront with regards to this approach, developing climate economic models that can be viewed as both the result of Nordhaus’ legacy and its successors”.

In 1991 Nordhaus published the first economic analysis of the reduction of greenhouse emissions: “To Slow Or Not To Slow”.

“The scientific background of the problem was well known since the end of the 19th century, but it is only after that article - so in the late 20th century - that its economic feature emerged - explained Enrica De Cian, professor of Environmental Economics at the Department of Economics at Ca’ Foscari and researcher at the Cmcc@CaFoscari. If we decide to reduce emissions now - “to slow” - we will limit their impact and ensure greater economic growth in the future. For the first time an economic growth model takes into account the benefits (energy used for production) and the consequences of greenhouse emissions (in particular socioeconomic harm when using fossil fuel) as well as the cost of their reduction”.
“The famous DICE model developed by Nordhaus has always been an open source, allowing many researchers around the world and at Ca’ Foscari to develop increasingly sophisticated models that are now used in the IPCC reports - including the Special Report Global Warming 1.5° that was presented a few days ago - and in researches on climate change mitigation and adaptation”.

Professor De Cian, professor Carraro and other researchers have contributed to design sophisticated models that include Nordhaus’ intuitions and references such as the role of technological change, and that of research and innovation - key factors for the decarbonization of our economy.